Internet billing method

ABSTRACT

The present disclosure may include, for example, a method for establishing a remitting arrangement between a provider and a vendor to create between the provider and the vendor an electronic process for remitting a portion of a transaction amount billed to at least one billing account of at least one customer associated with the provider for products or services purchased by the at least one customer from the vendor. The method can further include enabling, by way of equipment of the provider, equipment of the at least one customer to communicate with equipment of the vendor, and receiving at the equipment of the provider transactional information indicating that the at least one customer initiated an order for a product or service from the vendor for a transactional amount. The method can also include initiating with equipment of the provider the remittance of the portion of the transaction amount by way of the account of the vendor according to the remitting arrangement. Additional embodiments are disclosed.

CROSS REFERENCE TO RELATED APPLICATIONS

This application claims priority to and is a continuation of U.S. patentapplication Ser. No. 12/789,216, which was filed on May 27, 2010, whichis a divisional of U.S. patent application Ser. No. 11/397,204, whichwas filed on Apr. 4, 2006 and now abandoned, which is a continuation ofU.S. patent application Ser. No. 10/238,762 filed Sep. 10, 2002 and nowabandoned, which is a continuation of U.S. patent application Ser. No.09/975,839 filed Oct. 11, 2001 now U.S. Pat. No. 6,976,008 B2, which isa continuation of U.S. patent application Ser. No. 09/568,925 filed May11, 2000 now U.S. Pat. No. 6,351,739, which is a continuation of U.S.patent application Ser. No. 09/057,230 filed Apr. 8, 1998 now U.S. Pat.No. 6,188,994, which is a continuation of U.S. patent application Ser.No. 08/499,535 filed Jul. 7, 1995 now U.S. Pat. No. 5,794,221. Thecontents of each of the foregoing U.S. Patent Applications and issuedpatents is hereby incorporated by reference into this application as ifset forth herein in full.

BACKGROUND OF THE INVENTION

The present invention relates to a method of billing for commercialtransactions over the Internet.

The Internet is a vast worldwide interconnection of computers andcomputer networks. The Internet does not consist of any specifichardware or group of connected computers, rather it consists of thoseelements that happen to be interconnected at any particular time. TheInternet has certain protocols or rules regarding signal transmissionand anyone with the proper hardware and software can be part of thisinterconnection.

At present, the technical and financial requirements for connectingdirectly to the Internet are beyond the resources of most individualsand thus new businesses known as Internet access providers haveproliferated. These providers invest in the equipment needed to provideaccess to the Internet for subscribers who pay the providers a fee forthe access. Providers include companies whose only business is to offerconnection to the Internet, as well as on-line services such asCompuserve, American On-Line, and Prodigy. In addition, telephonecompanies and cable television companies have announced plans to provideInternet access. A party desiring to connect to the Internet by means ofa provider typically connects via a modem over a telephone network tothe provider's equipment which then connects the party, through theprovider's equipment, to the Internet.

Although the origin of the Internet was for military use, today theprimary users of the Internet are civilian. There is great activity atpresent attempting to utilize the Internet as a channel of commerce.

Many vendors advertise their products and services over the Internet andsolicit orders from Internet users for these wares. While the preferredmode of payment is by credit card, there is great reluctance to transmitcredit card account information over the Internet because of lack ofsecurity. Moreover, in situations wherein the transaction amount issmall—from pennies to a few dollars—it is not economically feasible touse a credit card transaction. There is a need to be able to ensure thatcommercial transactions over the Internet are at least as secure asconventional transactions over the telephone, through the mails, andwith on-line services where credit cards and/or billing accounts areused for purchases. Similarly, there is a need to be able to handle onthe Internet a large number of small-sized transactions, similar to whatis done by telephone companies for conventional telephone service.

The lack of security and the lack of a means to bill for smalltransactions are the biggest obstacles to commercial use of theInternet.

SUMMARY OF THE INVENTION

The main object of the present invention is to create a new businessopportunity for telephone companies, cable television companies,existing Internet access providers, and companies offering financialservices by creating a way for them to offer to their subscribers amethod of securely buying and selling goods and services of any valueover the Internet.

Another object of the present invention is an Internet billing methodwhich is cost effective for transactions having transaction amountsranging from pennies to a few dollars.

Still another object of the present invention is to provide a securemethod of billing commercial transactions over the Internet.

A further object of the present invention is an Internet billing methodwhich is simple to use from both the customer's point of view and thatof vendors on the Internet.

Yet another object of the present invention is a billing method whichcan be used by a large number of existing Internet users withoutrequiring major changes in how the users customarily behave and conductcommercial transactions.

These and other objects and advantages of the present invention areachieved by an Internet billing method in accordance with the presentinvention. A provider establishes an agreement with a customer, and asecond agreement with a vendor, wherein the provider agrees with thecustomer and the vendor to bill for products and services purchased overthe Internet by the customer from the vendor. Associated with thecustomer agreement are one or more billing accounts to which purchasesmay be charged. Associated with the vendor agreement are one or moremethods of remitting funds to the vendor. The provider creates access tothe Internet for the customer through the provider's equipment. When thecustomer orders a product or service over the Internet from the vendor,the provider obtains transactional information transmitted between thecustomer and the vendor including a transaction amount relating to theordered product or service and the provider then bills the transactionamount to a customer billing account and remits a portion of thetransaction amount to the vendor.

Which accounts are used may be specified in the agreements made betweenthe provider and the customer and between the provider and the vendor,or may be specified in the transactional information. If specified inthe transactional information, the selection of account can be made byreferencing the type of account (e.g., “VISA”, “phone bill”), or theposition of that account on a predetermined list (e.g., “the 3rdaccount”), and does not require that any actual account numbers betransmitted.

By the use of this method, there is no need for the customer to transmitover the Internet any information containing any of the customer'sbilling account numbers thereby maintaining the security of thatinformation.

The present invention, in a preferred embodiment, is a method ofproviding merchants with the ability to offer their customers securetransactions for the purchase of goods and services of any value overthe Internet, without the need for the customer to transmit any creditcard or other account numbers over the Internet, without the need forthe customer to sign up with any additional provider of services, andwithout the need to change the manner in which most customers currentlyuse the Internet.

In accordance with the present invention, a customer desiring topurchase goods and services over the Internet has prearranged access tothe Internet through the services of an Internet access provider. Suchproviders can be, for example, companies whose only business is to offerconnection to the Internet, companies which offer on-line computerservices, one of which is connection to the Internet, cable televisioncompanies, or telephone companies. In arranging for access with such aprovider, the customer has agreed with the provider on a method ofpayment which is, for example, by billing, or charge to a credit card,or charge to an account of the user which could be an account specificto the Internet or could be a more general account, such as an on-linecomputer services account, a cable television account, a telephoneaccount, or a bank account.

Once the prearrangements have been completed, using the provider'sservice to connect to the Internet typically involves calling atelephone number of the provider and being automatically connectedthrough the provider's equipment to the Internet.

Once connected to the Internet, the customer can browse around until anitem is located that the customer wishes to purchase, at which time thecustomer will follow the instructions created by the vendor, exchangetransactional information, and ultimately agree to purchase something bytaking an appropriate action. In the course of making the purchase, themeans of delivery of the goods or service will be established. Dependingon the type of goods, delivery can be made, for example, by mail (e.g.,in the case of a purchase of a book), by courier service (e.g., in thecase of a purchase of flowers), or by electronic transmission over theInternet (e.g., in the case of delivery of an electronic newsletter orpiece of software). The remaining element of the purchase transaction isthe manner in which the customer pays the vendor.

In accordance with the present invention, the provider has madearrangements with vendors who wish to sell goods and services over theInternet to the customers of the provider. The provider agrees to do thebilling associated with such sales for the vendors, and as part of theagreement, the provider and the vendor have agreed on the manner inwhich the provider will remit funds to the vendor. Examples of paymentinclude payment by check, credit to the vendor's credit card merchantaccount, or credit to another account of the vendor's, such as thevendor's cable television account, telephone account, or bank account.The account of the vendor to be credited need not be with the provider.The arrangements that are made will depend on the vendor's desires andthe capabilities of the provider. For example, if the vendor anticipatesmany small transactions and the provider is a telephone company, theycan agree that the provider will credit the vendor's existing telephoneaccount for amounts under some nominal amount and credit the vendor'scredit card merchant account for larger amounts. If the vendoranticipates large transactions, then they may agree that the providerwill pay by check or direct credit to the vendor's bank account.

In a typical transaction in accordance with the present invention, fromthe customer's point of view all use of the Internet appears to beconventional. Depending upon the prearrangements made between theprovider and the customer and between the provider and the vendor, thecustomer can charge a purchase, for example, to a credit card, to acable television account, to a telephone account or to a bank account.The account of the customer to be billed need not be with the provider.For example, the customer may be using one telephone company as anaccess provider and a second telephone company as a telephone serviceprovider and the account to be billed is that with the second telephonecompany. The customer specifies which account is to be billed by anindication to the provider, but neither the customer nor the vendor hasto transmit any account numbers over the Internet, because it is theprovider, not the vendor, who submits the charge to the credit cardcompany, the cable television company, the telephone company, or toanother account of the customer, or who debits the bank account of thecustomer, and the provider already has been given, during the course ofmaking prearrangements with the customer and the vendor, the appropriateaccount numbers of both the customer and the vendor. The provider sendsthis information to the appropriate party, and may do so by the samesecure means customarily used for similar transactions not made over theInternet.

From the vendor's point of view, the transaction is as secure as atransaction made over the telephone with a credit card. If the vendorwishes, the vendor may verify with the provider that the addresssupplied by the customer for shipment of the goods has been authorizedby the customer in the same manner in which such verification would bemade for the same transaction made over the telephone with a creditcard. In addition, because such a verification does not require thetransmission of any account numbers of the customer, the verificationcan be done over the Internet as part of the transaction transmissionitself if the provider and the vendor have prearranged to do so.

From the provider's point of view, the provider is made aware that thecustomer has authorized the charge by monitoring the data being sentover the Internet through the provider's equipment between the customerand the vendor. This can be done, for example, by specifying a specificcode which, when sent between the customer and the vendor, indicates tothe provider that a transaction has been completed. When the customerhas made a purchase, the provider charges the transaction amount to theagreed account of the customer and remits the agreed portion of thatamount to the vendor, keeping the differential as the provider's chargefor making the service available.

These and other features and advantages of the present invention willbecome apparent from the following detailed description of the inventionwith reference to the attached drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram of a system for carrying out the billingmethod according to the present invention;

FIG. 2 is a flow chart of one embodiment of the method according to thepresent invention; and

FIG. 3 is a flow chart of another embodiment of the method according tothe present invention.

DETAILED DESCRIPTION OF THE INVENTION

Referring to FIG. 1, a system for carrying out the method of the presentinvention is shown. In that system, the Internet is shown schematicallyas network 1 to which providers 2, 9, vendors 5.1-5.n, 6.1-6.n and8.1-8.n, and customers 4.1-4.n and 10.1-10.n (where n is an integer toindicate a range from one to many) are connected in different ways.

Provider 2 is connected to access network 3 and the Internet 1 andprovides access to the Internet 1 for customers 4.1-4.n and vendors6.1-6.n connected to access network 3. Access network 3 can be atelephone network, a cable television network, an on-line servicesnetwork such as Compuserve, American On-Line, or Prodigy, or a privateInternet access network. Similarly, provider 9 is connected to accessnetwork 7 and the Internet 1 and provides access to the Internet 1 forcustomers 10.1-10.n and vendors 8.1-8.n. Vendors 5.1-5.n access theInternet directly by their own equipment.

In accordance with the method shown in the flow chart of FIG. 2, forexample, in step 11 provider 2 establishes agreements with vendors5.1-5.n who are connected directly to the Internet, with vendors 6.1-6.nwho access the Internet via access network 3 and provider 2, and withvendors 8.1-8.n who are connected to the Internet 1 via access network 7and provider 9, to bill customers 4.1-4.n for goods and servicespurchased by them over the Internet from vendors 5.1-5.n, 6.1-6.n and8.1-8.n. Provider 2 also agrees to remit a portion of the collectedmoney back to the vendors. Provider 2 also establishes an agreement witheach of customers 4.1-4.n. These agreements provide that the providerwill bill the customer for goods and services purchased by them over theInternet. The billing will be done to billing accounts established inconnection with the agreements. The billing accounts can be, forexample, credit card accounts, telephone accounts, cable televisionaccounts, on-line services accounts, or bank accounts. The accounts neednot be with the provider if the provider has a billing agreement inplace with the party with whom the account was established.

As part of the services of the provider to customers 4.1-4.n, thecustomer is connected to the Internet 1 in step 12 at a desired time,typically by making contact via modem. Once connected to the Internet,the customer can interface with anyone of vendors 5.1-5.n, 6.1-6.n and8.1-8.n in order to find out about products or services offered by thosevendors.

When one of customers 4.1-4.n makes the decision to order a product orservice from one of vendors 5.1-5.n, 6.1-6.n and 8.1-8.n, in step 13 anexchange of transactional information occurs between the customer andthe vendor. This exchange may include identifying information relatingto the customer, such as the customer's Internet address, informationrelating to the products or services to be purchased, including thetransaction amount, the manner and time of delivery, and a referencenumber to identify the order. The vendor or the customer also canproduce a verification code signifying that a transaction has beencompleted which can be received by provider 2.

In step 14, the transactional information is obtained by provider 2. Thecommunication can be a separate transmission by the vendor or thecustomer to provider 2, or provider 2 can extract the information fromthe exchange of information taking place between the customer and thevendor through equipment of provider 2. Provider 2 can then sendverifying information to one or both of the customer and vendor toindicate that the transaction has been approved, if approval of a thirdparty, such as credit card company, is required. Most importantly, theentire transaction takes place without the need of communicating thecustomer's credit card or other account number over the Internet 1.

The product or service is delivered to the customer in step 15 and theappropriate customer account is billed by provider 2 in step 16.Provider 2 then remits the agreed payment in the appropriate manner tothe vendor in step 17, keeping the differential as a service charge forthe services rendered by provider 2. Steps 15, 16 and 17 may beperformed in any order.

As can be seen from FIG. 1, the method according to the presentinvention can be carried out in many ways. For example, referring toFIG. 3, vendor 5.1 in step 21 can establish remitting agreements withprovider 2 and provider 9 to remit to vendor 5.1 a portion of atransaction amount billed to the billing account of anyone of customers4.1-4.n and 10.1-10.n.

Similarly, each of vendors 6.1-6.n can establish a remitting agreementwith provider 9 for transactions carried out over the Internet betweeneach of vendors 6.1-6.n and customers 10.1-10.n.

A customer connects to the Internet in step 22. The customer exchangestransactional information with the vendor in step 23 and the vendordelivers a product or service to the customer in step 25, either beforeor after the vendor receives remittances from the provider in step 27.

In accordance with another feature of the present invention, prior tothe billing of the transaction amount to the account of the customer,and after obtaining the transactional information, the provider canobtain approval from a third party to bill the transaction amount to thebilling account. This is particularly true in the case where the billingaccount is a credit card account or a bank account. In that instance,approval must be obtained from a third party, i.e., the bank issuing thecredit card or with whom the bank account was established. Where theaccount is with the provider, approval would be obtained from theprovider itself. In a preferred embodiment of the present invention, theapproval can be obtained over the Internet and most preferably duringthe communication between the customer and the vendor.

In accordance with a further feature of the present invention, thecustomer can specify a particular billing account, for example, a creditcard account, a bank account, a telephone number account, a cabletelevision account or an on-line services account at the time that thebilling agreement is established with the provider. The specificationcan provide that one account will be used for certain transactions, anda different account for other transactions, for example, a telephoneaccount for transactions less than $5.00, and a bank account fortransactions of at least $5.00. Thereafter, whenever the transactionamount is to be billed, it will be billed to that specified billingaccount. Alternatively, the customer can specify a plurality of billingaccounts, for example, an AMEX account, a VISA account, a MasterCardaccount at the time that the billing agreement is established. When thetransactional information is communicated, it will include anidentification of which of those plurality of billing accounts thecustomer wants billed, without, however, specifying the account numberof the account. Thus the customer can merely indicate the account by the“brand” name AMEX, VISA or MasterCard or the customer can identify it asthe first account, second account or third account on a list previouslyestablished with the provider.

As noted above, the billing account is not necessarily with theprovider, that is, it can be with a third party such as a bank issuing acredit card, or a bank at which the customer has a bank account.Alternatively, the provider can be a first telephone company, but thebilling account can be with a second telephone company and charged bythe first telephone company to the telephone number account of thecustomer with the second telephone company, as is customarily done inconnection with conventional telecommunications services.

In accordance with the invention, the remitting can be by means ofsending money or by crediting a vendor account such as a credit cardmerchant account, a bank account, a telephone number account, a cabletelevision account or an on-line services account.

In a preferred embodiment of the present invention, the step ofestablishing the remitting account comprises specifying a particularvendor account to which the portion of the transaction amount will beremitted. The specification can provide that one account will be usedfor certain transactions, and a different account for othertransactions, for example, a telephone account for transactions lessthan $5.00, and a bank account for transactions of at least $5.00. In analternative embodiment of the present invention, the step ofestablishing the remitting agreement comprises the vendor specifying aplurality of vendor accounts to which a portion of the transactionaccount can be remitted. Thus when the transactional information iscommunicated, the vendor can identify which one of the plurality ofvendor accounts the amount is to be remitted to without, however,specifying the specific account number.

The vendor account can be an account with the provider or an accountwith a third party such as a credit card merchant account, or bankaccount, with a bank, or a cable television account with a cabletelevision company.

It is understood that the embodiments described hereinabove are merelyillustrative and are not intended to limit the scope of the invention.It is realized that various changes, alterations, rearrangements andmodifications can be made by those skilled in the art withoutsubstantially departing from the spirit and scope of the presentinvention.

1. A method, comprising: utilizing a system including at least oneprocessor to facilitate establishment of a remitting agreement between avendor and a provider to enable by way of an account associated with thevendor a remittance of a portion of a transaction amount billed to atleast one billing account associated with at least one customerassociated with the provider for products or services purchased by theat least one customer from the vendor; utilizing the system to causeequipment of the vendor to communicate with equipment of the at leastone customer permitting the at least one customer to purchase a productor service of the vendor; and utilizing the system to cause between thesystem and the equipment of the vendor a remittance of a portion of atransaction amount associated with a purchase transaction made by the atleast one customer by way of the account associated with the vendor,wherein the equipment of the vendor receives a communication indicatingthat the at least one customer initiated and authorized an order for aproduct or service of the vendor for the transaction amount, and whereinthe vendor initiates a delivery of the product or service to the atleast one customer after receiving the communication.
 2. The method ofclaim 1, wherein the product or service is delivered to the at least onecustomer by mail, courier service, or by electronic transmission.
 3. Themethod of claim 1, comprising utilizing the system to initiate a chargeto a billing account of the at least one customer responsive to thepurchase transaction without communicating over a communication networkbilling information associated with the at least one customer.
 4. Themethod of claim 1, comprising utilizing the system to receivetransactional information comprising one of identifying informationrelating to the at least one customer, the transaction amount, or areference to identify the purchase transaction.
 5. The method of claim4, wherein the transactional information is submitted to the system byone of the equipment of the at least one customer, or the equipment ofvendor.
 6. The method of claim 1, wherein the equipment of the at leastone customer initiates communications with the system by way of anInternet access network operated by a party unaffiliated with theprovider, and wherein the system, not the Internet access networkoperated by the unaffiliated party, enables the equipment of the atleast one customer to communicate with the equipment of the vendor. 7.The method of claim 1, wherein the system is operated by the provider,wherein the at least one billing account associated with the at leastone customer is charged the transaction amount by way of the system orequipment operated by a party other than the provider.
 8. The method ofclaim 7, wherein the billing account associated with the at least onecustomer is managed by the provider or the party other than theprovider.
 9. The method of claim 1, wherein the account associated withthe vendor belongs to the vendor or a party other than the vendor.
 10. Avendor apparatus, comprising: equipment initiating a communicationsession over a communication network with equipment of at least onecustomer, wherein the communication session over the communicationnetwork is enabled by equipment of a provider, and wherein the providerand a vendor are different parties; receiving during the communicationsession at least one communication over the communication networkindicating that the at least one customer initiated an order for aproduct or service of the vendor; initiating a process to deliver theproduct or service to the at least one customer after receiving the atleast one communication and without submitting a billing request to theequipment of the provider; and transmitting to the equipment of theprovider transactional information relating to the purchase transactionwithout submitting the billing request to the equipment of the provider,wherein a remittance of a portion of a transaction amount is initiatedbetween the provider and the vendor by way of an account associated withthe vendor in accordance with a remitting arrangement.
 11. The vendorapparatus of claim 10, wherein the product or service is delivered tothe at least one customer by mail, courier service, or by electronictransmission.
 12. The vendor apparatus of claim 10, wherein theequipment of the provider initiates a charge to a billing account of theat least one customer responsive to the purchase transaction withoutcommunicating over the communication network billing informationassociated with the at least one customer.
 13. The vendor apparatus ofclaim 10, wherein the transactional information comprises one ofidentifying information relating to the at least one customer, thetransaction amount, or a reference to identify the purchase transaction.14. The vendor apparatus of claim 10, wherein the equipment of the atleast one customer initiates communications with the equipment of theprovider by way of a network operated by a party unaffiliated with theprovider, and wherein the equipment of the provider, not the networkoperated by the unaffiliated party, enables the equipment of the atleast one customer to communicate over the communication network withthe equipment of the vendor.
 15. The vendor apparatus of claim 10,wherein at least one billing account associated with the at least onecustomer is charged the transaction amount by way of equipment of theprovider or equipment operated by a party other than the provider. 16.The vendor apparatus of claim 15, wherein the at least one billingaccount associated with the at least one customer is managed by theprovider or the party other than the provider.
 17. The vendor apparatusof claim 10, wherein the account associated with the vendor belongs tothe vendor or a party other than the vendor.
 18. A method, comprising:establishing a remitting arrangement between a provider and a vendor tocreate between the provider and the vendor an electronic process forremitting a portion of a transaction amount billed to at least onebilling account of at least one customer associated with the providerfor products or services purchased by the at least one customer from thevendor; enabling, by way of equipment of the provider, equipment of theat least one customer to communicate with equipment of the vendor;receiving at the equipment of the provider transactional informationindicating that the at least one customer initiated an order for aproduct or service from the vendor for a transactional amount; andinitiating with equipment of the provider the remittance of the portionof the transaction amount by way of the account of the vendor accordingto the remitting arrangement.
 19. The method of claim 18, wherein theequipment of the at least one customer communicates with the equipmentof the provider over a communication network, and wherein thecommunication network belongs to a party unaffiliated with the provider.20. The method of claim 19, wherein the equipment of the provider, notthe communication network operated by the unaffiliated party, enablesthe equipment of the at least one customer to communicate with theequipment of the vendor.